By Fred Leeb, Leeb Partners, LLC, November 15, 2017
What will happen to your business if some or all of the following come true:
1) Interest rates increase more than expected because the Fed continues to increase the Fed Funds rate and continues to tighten the money supply by $100’s of billions while faith in the dollar falls.
2) The federal deficit continues to spike in the trillions due to even larger budget deficits from defense and entitlement spending while tax cuts are implemented.
3) Domestic car sales decline due to production problems caused by changes in NAFTA, market saturation, higher interest rates, and the shift to longer-running electric vehicles.
4) The stock market declines from its all-time high and oil prices increase due to overoptimistic assumptions and heightened fears of either conventional or cyber war regarding Iraq, Afghanistan, Iran, Russia, North Korea, Venezuela, Pakistan, Ukraine, Saudi Arabia, Yemen or China.
5) Growth in China and/or India continues to decelerate due to domestic political unrest, protectionism or growth pangs causing lower purchases of commodities from the U.S. and other western countries and less favorable performance for U.S. subsidiaries located in those countries.
6) Housing purchases in the U.S. are depressed due to greater uncertainty in the national economy and locally because of potential declines in the auto industry.
7) Capital investment is deferred because of higher political risk regarding trade, income taxes, health care, criminal investigations and overall political gridlock.
8) Wages and salaries finally go up and finding good workers becomes more difficult because the U.S. already is at full employment and immigration is cut back further.
We have found that the best possible time to prepare for unexpected events is now. These efforts will improve your performance even if none of the above issues occur. Your organization will be much more organized, your strategies will be clearer to everyone and your performance will be stronger.
We have seen that the best decisions will be made after being able to answer questions such as the following:
1. Could cash flow still be adequate under realistic circumstances but woefully inadequate if even a few contingencies come true?
2. Are each of the managers fully confident that they have verified the key assumptions and are they ready to be held accountable for either success or failure?
3. Are mid-level managers already operating as if they are overwhelmed and without a sense of urgency and commitment? If so, how can this be corrected right away?
6. Is there a spirit of teamwork throughout the organization where everyone is pulling together in the same direction or is there a culture of individuals or groups stepping on others to go up the corporate ladder?
7. Will succession issues, family rivalries or management infighting make success more difficult?
8. Do the budget, the strategic plan and the financial projection tie together to enable success?
We have found that answering these questions could double net cash flow, identify upsides, examine risks, generate reliable information, and build solid teamwork. In the meantime, we will work with you to identify cash leaks and unrealistic budgets, find overhead imbalances and capacity constraints, and point out the most urgent action steps required.
We work cooperatively with you and your other professionals in a proactive manner to operate as a highly-effective team. Under your direction, this process often can work to break a logjam and be a catalyst for many positive changes. The time to start the process is now.
If you would like your business issues addressed by an experienced, unbiased outside expert, call Fred Leeb at Leeb Partners, LLC now at 248-514-3262 for a free initial meeting to identify the issues and begin to implement the necessary changes. The meeting will be completely confidential and without further obligation.